Do you need to tweak the Advance Child Tax Credit (AdvCTC) amount you've been receiving? You can adjust December's final payment as long as you let the Internal Revenue Service know by Monday, Nov. 29. Specifically, you need to update your Child Tax Credit data at the agency's special online website by 11:59 p.m. Eastern Time on Monday, Nov. 29. Last payment of 2021: The American Rescue Plan, the COVID-19 relief measure that became law in March, bumped up the Child Tax Credit amount for the 2021 tax year. The law also instructed the IRS to issue half of the... Read more →
Single parenting can be challenging, especially at tax time and you and your ex-spouse are vying for the same child-related tax breaks. (Photo by MART PRODUCTION from Pexels) For some, this Thanksgiving was quieter than normal. Their youngsters spent Turkey Day with their parent as part of the alternating holidays agreement reached in the divorce decree. Breaking up is always hard. It's also complicated when it involves lawyers, court hearings and the Internal Revenue Service. It's can get even more complex when children are involved. I'm not a lawyer. I don't play one on the ol' blog. And I don't... Read more →
Photo: Satya Murthy Happy Thanksgiving! This holiday obviously is about acknowledging all we have to be thankful for in the past year and beyond. It's best when spent with family and friends. And, of course, it's about eating! Turkey and dressing. Green bean casserole. Double-stuffed baked potatoes. Celery stalks overflowing with pimento cheese. Fruit salad. Pies. Lots of pies. That was what I grew up eating. We lived in the same West Texas town as grandparents, so the fourth Thursday of November definitely was a beloved routine. My Mom always helped out my Mam-ma, her mom, and on most occasions... Read more →
This Thanksgiving for the first time in months (or years) families will be getting together to share and make new memories. (Photo by Photo by cottonbro from Pexels) This Thanksgiving week, many of us are seeing family for the first time in months, if not years. (Thanks, no thanks, COVID-19.) If your family members include aging parents, in addition to lots of long hugs and catching up and crying, you probably should spend some time making sure they're doing OK when you're not around. If you do find Mom and Dad could use a little, or even a lot of... Read more →
A tax credit for dependents offers a break for older children, extended family members, and even non-relatives. Thanksgiving is the traditional time for families to gather. But not all families are traditional. That's evident in real and tax life. The family-friendly tax break that's been getting most attention of late is the Child Tax Credit (CTC) and the advance payments for 2021 that are going out through December. I'm guilty, as a perusal of the ol' blog quickly shows. But some families aren't eligible for the CTC, either the money being distributed now or when they file their annual tax... Read more →
Photo by August de Richelieu from Pexels Happy National Family Week! Yes, this is a real commemoration that officially kicked off on Sunday, Nov. 21. It runs through the 27th. The week was launched around a half-century ago by a couple Indianapolis public school staffers. Since the 1970s, U.S. presidents have acknowledged National Family Week. President Joe Biden's proclamation cites "the importance of spending time with relatives," which explains why the week that Americans celebrate Thanksgiving was selected for National Family Week. Biden's statement also noted the "commitment to investing in our Nation's families." Increased tax credit help for families:... Read more →
Image courtesy IRS It's Thanksgiving week! Nov. 25 is circled in green for go by families across the United States. They finally will see their COVID vaccinated families and friends in person for the first time in almost two years. But folks in parts of California and all of Mississippi need to mark another calendar date a bit farther down the road. Jan. 3, 2022, is the new 2020 tax year deadline for them. Yep, we're well past October's extended filing deadline and other Internal Revenue Service due dates, but the tax ramifications of major disasters continue to be felt.... Read more →
Photo by RODNAE Productions from Pexels I know, it seems like it's all crypto all the time of late here at the ol' blog. But that's because that's what's happening right now in the tax world. There is, of course, the new tax reporting rules for digital assets, including cryptocurrency, that are part of the just-enacted transportation law. One of the reasons lawmakers approved the closer look by the Internal Revenue Service at digital transactions is because law enforcement officers have found the sector rife with criminal tax activity. It's not just anecdotal reports. OK, it is some anecdotal reports,... Read more →
Photo by Alesia Kozik from Pexels President Joe Biden signed the Infrastructure Investment and Jobs Act of 2021 (IIJA) into law on Monday, Nov. 15. The new law, like prior transportation bills, does include plenty of traditional roads and bridges provisions. But it went decidedly digital to help cover some of its $1.2 trillion costs. The IIJA includes reporting requirements that mandate cryptocurrency exchanges share information with the Internal Revenue Service. The good news for crypto fans who are freaking out is that they have time to adjust. These reporting rules generally don't go into effect until 2023. Here are... Read more →
AMT law changes plus annual inflation adjustments mean that this parallel tax aimed at the wealthy is no longer such a broadly-based ATM for the tax collector. The political and legislative battle over how to collect from the wealthiest taxes, which was mentioned in yesterday's Part 6 tax inflation post on (among other things) estate taxes, is not new. It's been going on for decades. The Alternative Minimum Tax, or AMT, is one way that Washington, D.C., came up with to ensure that the rich pay at least some taxes. This post, Part 7 of the ol' blog's 10-part inflation... Read more →
Current political talk (OK, fights) on Capitol Hill is full of discussions (OK, fights) over how and how much to tax the rich. The discussions (OK, fights) are driven by the fact that the tax code already is full of provisions that help the wealthiest among us stay that way. But some of the tax laws can help all of us, regardless of our income level, increase our relative wealth. And some of those Internal Tax Code components are adjusted each year for inflation. This Part 6 of the ol' blog's annual tax inflation series looks at how these annual... Read more →
Medical matters have been front and center for the last two years due to the COVID-19 pandemic. Even without a global health crisis, taxpayers know they need to keep an eye on not just their wellbeing, but also on how medical expenses could create a tax outcome that's healthier for the filers rather than the Internal Revenue Service. There are a variety of medical tax breaks. And several of them are adjusted each year to account for inflation. Here, in this Part 5 of the ol' blog's annual tax inflation series, is a look at those changes for the 2022... Read more →
There's one thing that every taxpayer, regardless of their financial situation, can agree on. We all want to pay the least amount of taxes to Uncle Sam as possible. The key way to get our taxable income to the lowest possible level is by claiming deductions, either the standard option by itemizing as discussed in Part 2 of the ol' blog's annual inflation adjustment series. Either option helps lower your taxable income. But there are additional deductions we should check out at filing time, like the above-the-line deductions anyone can claim. Then there are tax credits, which are a better... Read more →
Photo: Juan Pablo Serrano Arenas from Pexels The Internal Revenue Service has a holiday gift for eligible families who've yet to collect their Advance Child Tax Credit payments. If sign up by Monday, Nov. 15, for the early-issue amounts, which are up to $300 per month for each child younger than age 6 and up to $250 per month for each child ages 6 through 17, you'll get all the money you qualify for in mid-December. That definitely could challenge Santa for the seasonal present delivery crown. Bumped up and early tax break: The Child Tax Credit (CTC) already was... Read more →
Photo by Joshua Welch via Pexels It actually happened. Infrastructure Week — or more accurately, weeks — finally is real. And it will be officially celebrated on Monday, Nov. 15, when President Joe Biden signs H.R. 3684, the Infrastructure Investment and Jobs Act, into law. The measure, of course, provides fund for traditional transportation projects across the United States. It also includes money for soft infrastructure efforts, notably extending broadband internet service to the more rural parts of the country, as well as several environmental components. Overall, the bill costs $1.2 trillion. Of that amount, $550 billion of new federal... Read more →
Most of us would love to win the lottery. And most of us know that hitting a jackpot means the U.S. Treasury is a winner, too. Taxes due on gambling winnings are just part of the price of such payoffs. But an Ohio man pushed his luck a bit too far. He's now awaiting sentencing on his attempt to evade taxes on a lottery jackpot. The Hillard, Ohio, man pleaded guilty this week in U.S. District Court to one count of filing a false tax return with the Internal Revenue Service in connection with his $1 million lottery win 2015.... Read more →
Tax year-in and tax year-out, most filers claim the standard deduction instead of itemizing. The option has always been appealing because it's easy. There are no receipts to save, no added calculations. Even better, the Internal Revenue Service provides the standard amount you can claim, based on your filing status, right there on the first page of Form 1040. The standard deduction trend got even more participants after the Tax Cuts and Jobs Act (TCJA) of 2017 essentially doubled the standard amounts. And those now more valuable deduction amounts still usually get a boost at the end of every year... Read more →
Inflation has spiked, which doesn't leave any of us as happy as this rising hot air balloon. However, some tax related-inflation figures for 2022 could put a smile on some taxpayers' faces. (Photo by Don Hainzl from Pexels) Inflation is all the talk right now, with October's 6.2 percent jump in consumer prices grabbing the attention of shoppers, politicians, and news media. But inflation also matters when it comes to taxes. Every year, the Internal Revenue Service revises an expansive array amounts that apply to tax situations. Today is that day for the agency's annual inflation adjustments that will generally... Read more →
Democrats still are looking to ease the limit on the federal tax deduction on state and local taxes, or SALT as the tax world, and now every affected state and local taxpayer, refers to it. The latest proposal is to raise the $10,000 cap imposed by the Tax Cuts and Jobs Act of 2017 to $80,000 through 2020, then revert to $10,000 in 2031. Yeah, budget machinations at work. Surpassing standard amounts: That's got some folks looking at whether it would be worth itemizing again. To opt for detailing deductions on Schedule A, you'll need to come up with enough... Read more →
Banks can be imposing, but having an account can mean quicker receipt of your tax refund via direct deposit. (Photo by Expect Best from Pexels) It's been a busy year for the Internal Revenue Service. The agency continues to feel the reverberations from COVID-19. Throughout 2021, the IRS has been distributing coronavirus-relief-related tax money, including Advance Child Tax Credit payments and refunds based on unemployment benefits adjustments. Meanwhile, there was its main tax job. Through Oct. 22, the IRS had received almost 168 million tax returns. The good news for the tax agency is that most of those returns —... Read more →